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Future Military Pay Raises Could Be Less Dramatic

Tying the President’s Hands

Updated: November 13, 2017

Over the next few weeks, the Senate will be working diligently on their version of the National Defense Authorization Act for Fiscal Year 2018 (2018 NDAA). The Senate’s current version, as of today, August 12, 2017, contains language that supports President Trump’s desire for a 2.1 percent military pay raise for fiscal year 2018 (effective January 1, 2018).

By July 14th, the full House of Representatives had already deliberated and passed their version of the 2018 NDAA, H.R. 2810, by a vote of 344-81, which states under section 601, ANNUAL ADJUSTMENT OF BASIC MONTHLY PAY, “The adjustment in the rates of monthly basic pay required by subsection (a) of section 1009 of title 37, United States Code, to be made on January 1, 2018, shall take effect, notwithstanding any determination made by the President under subsection (e) of such section with respect to an alternative pay adjustment to be made on such date.”

To simplify subsection (a) of section 1009 of title 37, United States Code, it essentially says that a military pay raise percentage will be derived using a measurement of the Employment Cost Index (ECI) for the base quarter of the year before (for the three-month period ending on September 30 of such year); specifically the index for the private industry worker’s wages and salaries. For the 2018 military pay raise, the ECI percentage that must be used was released on October 28, 2016, at 0830EST, and that percentage was 2.4 percent.

That is how the House’s version approved a 2.4 percent pay raise without specifically stating 2.4 percent. As a matter of fact, because of the language of subsection (a) of section 1009 of title 37, United States Code, neither version of Congress’ defense bills would need to stipulate a pay raise if not for that pesky subsection (e). Subsection (e) give the President the ability to make an adjustment “because of national emergency or serious economic conditions affecting the general welfare”.

(e)Presidential Determination of Need for Alternative Pay Adjustment.—

  1. If, because of national emergency or serious economic conditions affecting the general welfare, the President considers the pay adjustment which would otherwise be required by this section in any year to be inappropriate, the President shall prepare and transmit to Congress before September 1 of the preceding year a plan for such alternative pay adjustments as the President considers appropriate, together with the reasons therefor.
  2. In evaluating an economic condition affecting the general welfare under this subsection, the President shall consider pertinent economic measures including the Indexes of Leading Economic Indicators, the Gross Domestic Product, the unemployment rate, the budget deficit, the Consumer Price Index, the Producer Price Index, the Employment Cost Index, and the Implicit Price Deflator for Personal Consumption Expenditures.
  3. The President shall include in the plan submitted to Congress under paragraph (1) an assessment of the impact that the alternative pay adjustments proposed in the plan would have on the Government’s ability to recruit and retain well-qualified persons for the uniformed services.

The “or serious economic conditions” portion is fairly ambiguous, and for the last few years, President Obama, and most recently President Trump, has used this clause when introducing their defense budget proposals to Congress.

The current Senate bill proposes to eliminate paragraph two and the “or serious economic conditions affecting the general welfare” option. If the Senate’s current language is passed, and remains in a reconciled House and Senate version, it will be sent to President Trump for approval. If the President signs it, the new military pay adjustment law’s subsection (e) will read:

(e)Presidential Determination of Need for Alternative Pay Adjustment.—

  1. If, because of national emergency, the President considers the pay adjustment which would otherwise be required by this section in any year to be inappropriate, the President shall prepare and transmit to Congress before September 1 of the preceding year a plan for such alternative pay adjustments as the President considers appropriate, together with the reasons therefor.
  2. The President shall include in the plan submitted to Congress under paragraph (1) an assessment of the impact that the alternative pay adjustments proposed in the plan would have on the Government’s ability to recruit and retain well-qualified persons for the uniformed services.

With that language, the President would only be able to make an alternate proposal IF we were in a state of national emergency. For a President to make that distinction, we would have to be in some pretty difficult times.

In the end, I doubt the language will make it in the final bill, but if by some off chance it does, much of the politics surrounding military pay adjustments will be eliminated.

We can always hope.

Update (November 9, 2017): During the 2018 NDAA reconciliation process, the Senate receded the provision mentioned in this article that would have tied the President’s hands.



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